Why Corporations Need Green Design

Currently there are three known advantages to green design, and all of them have something to do with cost savings: energy and water conservation; healthier, more productive interior office environments; and new tax credits in several states, notably New York and California.

Cost Savings
About 32 percent of the electricity generated in the U.S. is used to heat, cool, ventilate, and light commercial buildings designed to consume eight watts of power per square foot. In contrast, a multi-story building designed with an energy-efficient heating and cooling system can operate with a much more compact air-conditioning system, requiring half the power—three to four watts per square foot.

This 50 percent reduction is achieved through creative use of fans, pumps, chillers, ducts, and cooling towers. For example, underfloor cooling systems (in which air is pumped through open plenums below the floor) requires less air pressure than forcing the air through ducts.

Photovoltaic (PV) technology is still expensive, but architects continue to experiment with it, incorporating PV panels into building façades and rooftops. This is a logical step because integrated PV panels carry minimal costs for additional structural or electrical wiring modifications; no costs for off-site purchase or preparation of energy; and a cost credit for the materials used. In addition, PV technology reduces demand for utility-produced energy at peak hours.

New types of wastewater systems that use stormwater and graywater for flushing and mechanical systems save water. High-efficiency fixtures and waterless urinals can significantly reduce the building owner’s water bill.

Healthy Workplace, Healthy Workers
Cost savings related to worker productivity are difficult to measure. Studies that analyze the profits associated with green design rely on the premise that employee salaries are the single largest line item of almost every corporation. Because of this, even a tiny increase in employee productivity can exceed a corporation’s entire energy bill.

A working environment flooded with natural light and fresh air is known to improve wakefulness, reduce absenteeism, and create a positive relationship between employees and management. The average employee costs $375 per square foot in space and energy usage; if this worker’s productivity were to increase by 1 percent, or $3.75 for a 1.6 million-square-foot building, a savings of $6 million dollars would be realized.

Tax Credits
New York is the first state in the country to enact tax credits that reimburse developers for the higher costs associated with high-performance buildings. The New York State legislation provides a credit of 5 percent of the capitalized cost of the project—up to $3.75 per square foot for interior work and $7.50 per square foot of exterior work.

Following New York’s lead, California instituted a number of incentive programs including the Solar (and Wind) Energy System Credit, which provides personal and corporate income tax credits for the purchase and installation of solar energy systems, defined as photovoltaic or wind-driven systems. The tax credit covers up to 15% of the cost paid for the purchase and installation of a solar energy system after deducting the value of any municipal, state, or federal sponsored financial incentives. The state also adjusted its tax code to make active solar-energy systems installed between January 1, 1999 and January 1, 2006 exempt from property taxes.

Robert Fox is senior principal at Fox & Fowle Architects in New York City.